Single Entry and Double Entry Accounting

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Single entry accounting/Cash accounting. This system records only cash movement of transactions and that too up to the extent of recording one aspect of the transactions. This means that only receipt or payment of cash is recorded and no separate record is maintained (about the source of receipt and payment) as to from whom the cash was received or to whom it was paid. Double entry book keeping/Commercial accounting. Double entry or commercial accounting system records both aspects of transaction i.e. receipt or payment and source of receipt or payment. It also records credit transactions i.e. recording of Electricity Bill or accruals of Salary payment etc. This concept will be explained in detail in the next lectures but for the time being it should be noted that in cash accounting date of receipt / payment of actual cash is important while in commercial accounting the date on which the expense is caused (whether paid or not) as well as the spreading of the cost of c
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ORGANIZATIONAL DESIGN DECISIONS

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Organizations aren’t structured the same way. Top managers put a lot of thought into how best to design the organization’s structure. That “best” design depends on four contingency variables: the organization’s strategy, size, technology, and degree of environmental uncertainty.
 
There are two generic models of organizational design.
1. A mechanistic organization is an organizational structure that is characterized by high specialization, rigid departmentalization, narrow spans of control, high formalization, a limited information network, and little participation in decision making by low-level employees.
2. An organic organization is a structure that is highly adaptive and flexible with little work specialization, minimal formalization and little direct supervision of employees.
3.  When is each design favored? It “depends” on the contingency variables.

Contingency factors—appropriate structure depends on four contingency variables:
1. Strategy and structure
One of the contingency variables that influence organizational design is the organization’s strategy.
Most current strategy-structure frameworks tend to focus on three strategy dimensions:
1)  Innovation—needs the flexibility and free flow of information of the organic organization
2)  Cost minimization—needs the efficiency, stability, and tight controls of the mechanistic organization
3)  Imitation—which uses characteristics of both mechanistic and organic
 
2.  Size and structure
There is considerable historical evidence that an organization’s size significantly affects its structure. Larger organizations tend to have more specialization, departmentalization, centralization and formalization although the size-structure relationship is not linear.
Technology also has been shown to affect an organization’s choice of structure.
a.  Every organization uses some form of technology to transform inputs into outputs.
b.  The study of structure and technology found that organizations adapted to their technology
and that three distinct technologies had increasing levels of complexity and sophistication.
1)  Unit production is the production of items in units or small batches.
2)  Mass production is large-batch manufacturing.
3)  Process production is continuous-process production.

3  Environmental uncertainty and structure
The final contingency factor that has been shown to affect organizational structure is environmental uncertainty.One way to manage environmental uncertainty is through adjustments in the organization’s structure. The more uncertain the environment, the more flexible and responsive the organization may need to be.

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